The Remediation Fund has become the main source of budget resources for the reconstruction of the country. Last year, it managed to accumulate UAH 61.9 billion through forcibly seized or confiscated Russian assets and deductions from the National Bank. The government allocated UAH 56.6 billion of these funds for various areas of recovery; however, effectively, only UAH 38.1 billion was used.
The process of distributing the fund’s resources was of interest to the Accounting Chamber, which decided to audit it in order to find out:
– whether the legal regulation and organizational support of the process of resources’ disbursement were sufficient;
– whether the prioritization of areas and projects was ensured;
– whether the results of the disbursement process were transparent and accessible to stakeholders and the public.
Based on the results of the audit, the Accounting Chamber found shortcomings in all aspects of the study. Key ones include:
– granting excessive discretionary powers to the government and the Interagency Working Group in the process of selecting recovery projects;
– inefficient and insufficiently transparent process of resources’ disbursement;
– lack of monitoring of the use of the fund’s resources and control measures by the Ministry of Infrastructure;
– poor digitalization of the process due to the incomplete functioning of the DREAM system.
Significant emphasis in the report is on the problem of inadequate prioritization of recovery projects. The lack of clear criteria and approved methodology made it possible to freely change approaches to its implementation and to approve projects that had been previously rejected. According to the findings of the Accounting Chamber, UAH 43.1 billion (more than 76%) of the Remediation Fund’s resources was disbursed without prioritizing projects.
Notably, the recommendations provided as a result of the audit largely echo the recommendations provided by TI Ukraine based on the results of the study we conducted following the year of the Remediation Fund’s operation. These include:
– identifying the conceptual and strategic framework of the recovery policy;
– improving approaches to prioritizing directions of resources’ disbursement;
– disbursing the fund’s resources considering the approved prioritization methodology;
– accelerating the introduction of the DREAM system;
– enhancing liability for assessing the effectiveness of the use of budget funds.
The material was prepared within the framework of the Digital Transformation Activity, funded by USAID and UK Dev.
The recommendations provided as a result of the audit largely echo the recommendations provided by TI Ukraine based on the results of the study we conducted following the year of the Remediation Fund's operation.
